It’s the end of decade of record earnings, says Chartered

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STANDARD Chartered warned that 10 years of record earnings are likely to end this year, with profit set to fall because of losses in Korea, a slowdown in its key Asian markets and tougher regulations.

Shares in the London-listed bank, which makes more than 90 per cent of its profit in Asia, Africa and the Middle East, tumbled more than 7 per cent to their lowest level for 16 months.

Standard Chartered said yesterday that operating profit in its consumer bank will be down by at least 10 per cent from a year ago because of problems in Korea and profit from wholesale banking is expected to be flat, leaving overall profit down.

“We’ve seen significant softening in this fourth quarter, particularly in financial markets,” group finance director Richard Meddings said.

This was their lowest level since August 2012, when the shares were hit by concerns about a fine from US authorities for breaking sanctions on Iran.

Analysts said the concern now is the bank’s growth prospects.

Top-line growth is the key issue, Shore Capital analyst Gary Greenwood said, adding that potentially higher capital requirements mean that it will be difficult for the company to make short-term headway on its return on equity.

Income for the full year is likely to be “broadly flat” from 2012, the bank said, against analysts’ expectations for a rise of about 4 per cent.

After a slowdown in financial markets that began in August, Mr Meddings said the fourth quarter had been weaker than the third quarter.

Particularly hard hit was its rates business, where activity had been sapped by uncertainty over the direction of interest rates.

The bank said it is keeping a “tight rein” on costs but they would be slightly higher than 2012.